Groupon is bad for business – no April fool

According to BusinessWeek, Groupon could be the fastest growing business of all time – going from zero to rejecting a rumoured six billion dollar offer from Google two years later on the basis it seriously undervalued the company. It's now eyeing up a twenty five billion dollar IPO. Not bad for a discount voucher business.

"Would you go back to the spa?" I ask. "Definitely" she replies. And then came the qualifier, unprompted: "When they run another Groupon deal."

In other words, the spa in question secured a transaction and eliminated themselves from building a mutually-valued relationship. My sister-in-law will now find it impossible to value the service in her mind at £300, or indeed much more than £100. And with Groupon taking 40-50% commission, it will have been a loss-making transaction at that (following standard accounting principles).

Perhaps Groupon recognises this challenge. Its new service, Groupon Now, is a real-time and timebound play. Got an empty table for lunch? Would you like to fill it than have it go empty? Then promote it now to people looking for lunch and looking for a bargain. This is a classic focus on so-called perishable stock, and reminds me of Mercata and LastMinute of a decade ago.

This could be useful. It could give your business the opportunity to present its wares to as yet unsatsified consumers, now, whilst helping to 'sweat your assets'. But this must translate into long-term loyalty (excepting transient passing trade) for your business to reap the full lifetime value of the customer, and indeed all the friends and family she might bring with her.

In The Business of Influence (Amazon UK, Amazon US) I discuss what I consider to be the endgame here, buyer marketing. Rather than business marketing products and services to consumers, buyer marketing entails consumers marketing their need to potential suppliers.

"Anyone out there want to serve me mushroom pizza this lunchtime?" "I need to dry clean my winter coat; any offers?" Wrap in the qualitative aspects of so-called social commerce, and a business should be able to articulate the value of its offer in its response, not just its price.

In March 2010, I gave a presentation on PR and SEO at the CIPR HQ in Russell Square, London, to around 75 senior in-house communications directors and managers. I asked how many of them used Google Analytics data from their own corporate sites to inform their PR and communications strategies. Not a single hand went up. In the intervening months, I’ve been boring for Britain to anyone who’ll listen that asking clients for access to Google Analytics should be one of the key questions any PR should be asking. More...

So… the alcohol industry has slammed a report by Gerard Hastings and Nick Sheron in BMJ that brandished the self regulation code as “clumsily imposed”, and asks for much tighter regulation - similar to the regulations currently in force in France. The mad.co.uk report features a statement from Diageo (owner of Guinness amongst other) describing how well they (and others) comply with the various codes of practice.

Of course, it would be correct to point out that the last upheld complaint against Diageo by the ASA was in 2006 - and that since then no complaint was upheld. More...

This morning I popped over to my local Nordstrom to check out what's new for Spring. David Angiulo helped me choose some styling shirts that I can wear with my Peter Millar blue suit. As we were heading to the cash register, he asked me if I'm on Twitter. It was a very low key, very casual question. It did not feel pushy in any way.

Guy Kawasaki is nothing less than enchanting. His vision and experience come to life through an inspired art of storytelling that is, well, inspiring. Guy possesses a truly unique and special talent to captivate your heart, mind, and attention.

I first followed Guy when he was chief evangelist at Apple. He introduced businesses to an entirely new art form marketing through engagement and empowerment. Over the years, I’ve also followed his work in Silicon Valley spanning from Garage.com to Alltop as well as pored over every book he’s written. More...

A study published in 2010 surfaced a startling statistic, “75 percent of employers say their business has no formal policy instructing employees on the appropriate use of social networking sites on the job.” The report, “Employer Perspectives on Social Networking,” compiled date from 34,000 businesses in 35 countries.

Does your organization have a formal policy regarding employee use of social media? Perhaps better asked, does your organization offer training, guidelines, and insights to help employees excel in new media on behalf of your business?

In the same study, 63% of employers that employed social networking policies reported that those policies improved productivity. More...

comScore released data showing that 170 million U.S. Internet users watched online video content in February for an average of 13.6 hours per viewer. The total U.S. Internet audience engaged in more than 5.0 billion viewing sessions during the course of the month.

Google Sites, driven primarily by video viewing at YouTube.com, ranked as the top online video content property in February with 141.1 million unique viewers. VEVO ranked second with 49.0 million viewers, followed by Microsoft Sites with 48.8 million, Yahoo! Sites with 46.7 million, and Facebook.com with nearly 46.7 million. More...

The AVE (advertising value equivalence) approach to PR measurement and evaluation was simple. And utterly wrong.

It’s a specious sum based on false assumptions using an unfounded multiplier and only addressing a fraction of the PR domain – a greater waste of time and effort you couldn’t hope to find.

Measurement and evaluation is essential, but requires real strategic understanding, diligence and perseverance. For me, it represents yet another distinction between the 21st Century PR professional and the 20th Century practitioner. More...

Long time readers will know that I’m not a fan of the $10 (or less) per keyword article copywriting gigs you find on freelance bidding websites, like Elance and Guru. I pity the copywriters that feel forced into these jobs, where they’re paid sweat shop wages to hammer out 10-20 articles a day just so they don’t have to live in a box.

The poet T.S. Eliot once wrote "If I had more time I would have written a shorter letter." Truer words were never spoken as it more difficult to efficiently convey an idea or message than to wax poetic.

As social is an emerging trend, many have put down their soapboxes to talk about online communities. Consequently, there is some good (and lots of just OK) advice "out there" on building online customer communities -- yielding a great deal of information to sort through and parse. More...

A second round of digital subscriber figures from The Times, and what it means for public relations practitioners

Murdoch’s band of digital revenue folks have released a second set of subscriber figures, eight months after The Times paywall went up. In short, all the line graphs in Murdoch’s boardrooms must be pointing skywards. Digital only monthly subscriptions rose to 79,000, up 60% on the figures revealed four months ago.

The flip side of this success is the growth of digital subscriptions is slowing, from 50,000 new subs in the first four months of the paywall to 29,000 subs in the second. More...

While smartphone demand continues to grow, many mobile phone users are still purchasing the less-expensive feature phones. According to the latest market study by ABI Research, during 2010 feature phones comprised over 75 percent of the handset market.

Consumers purchase feature phones for a variety of reasons including the need for a device that is optimized for a specific application, such as text messaging.

"A messaging phone is a feature phone that has been enhanced for messaging services including SMS, MMS, mobile email, and mobile IM. More...

1 Comment

The Groupon business model:
Sucks money out of the local economy and into the hands of a corporate (EG Groupon).
The discount-deals company may be based in another country so the money is being taken out of your own economy.
many small businesses will end up paying less in tax because of the profits being eroded.
The big corporate businesses such as Groupon with have top-notch accounts and pay less revenue (proportionately) than small businesses of there will be less tax for the government coffers.
Large discounts are unlikely to produce customers that will return.
Potential for annoying your important existing customer base.
People will look for discounts as the cornerstone of their shopping habits - it destroys loyalty.
Businesses will be losing customers as their existing customers join the Groupon feeding-frenzy.
Local businesses will start competing with one-another through fire-sale prices.
People will ask for discounts even when none are on offer - it will become a de-facto standard method of shopping.
Groupon are already recruiting affiliates to shill for them - creating a sales force out of the bargain hunters.

All in all, it looks like a sure-fire way to kill off many types of small businesses.